TMI Blog2013 (9) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has claimed excess expenditure. In such circumstances the estimated addition does not necessarily indicate that there is concealment of income or furnishing of inaccurate particulars of income on the part of the assessee - Decided against Revenue. - ITA No.1068/Ahd/2012 - - - Dated:- 10-7-2013 - D K Tyagi And A Mohan Alankamony, JJ. For the Appellant : Shri Rahul Kumar, Sr. (DR) For the Respondent : None ORDER:- PER : A Mohan Alankamony This This appeal of the Revenue is directed against the order of the learned CIT (A)-V, Surat in Appeal No. CAS-V/25/11-12 dated 14-02-2012, for the assessment year 2006-07, passed u/s 250 read with section 271(1) ( c) of the Income Tax Act. 2. The revenue has raised four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice u/s. 271 (1) (c) of the Act was not served on the appellant as no such notice was received by the appellant. The notice might have been served on a stranger but not on the assessee. In the absence of Notice, the assessee could not submit the explanation before the Assessing Officer. 1. The only ground involved in the case the levy of penalty u/s. 271 (1) (c) of the Act on following additions made in order passed u/s 143(3) of the Act on 26.12.2008. 2. The Assessing Officer made disallowance of 20% of Rs.1,37,46,363/- claimed by the assessee for various expenses as under: 1. Karigar Majoori expenses Rs.1,32,48,051 2. Legal charges Rs. 17,050 3. Sala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted labour bills of income whereas in Para d stated that no such details were furnished which is factually not correct. The copy of one labour bill is enclosed. iv. The workers having left the premises due to closure of business on account of recent heavy lay off in diamond business and therefore, they cannot be produced. v. The Assessing Officer admitted to have received copies of wage registers which were submitted after verification of original register by Assessing Officer. The Registers reveal the piece wise records of work done. vi. In para h the Assessing Officer accepted to have verify labour Registers and piece wise production details. vii. The postal ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The Gross Profit of assessee is 9.02%. In most of the case of diamonds in Range-8 and Rnge-9 Gross Profit of 6% is estimated in diamond business. The copy of Order of NBA Diamonds Mfg. Co. is enclosed in which Gross Profit of 6% was estimated and your honour had confirmed the same. 7. In the case of Vanmalibhai Bhagwanbhai Patel V/s. ITO the Hon ble ITAT Ahmedabad Bench deleted the addition of 10% of labour expenses disallowed by Assessing Officer. The copy of order of ITAT is enclosed. 8. The details of Miscellaneous Expenses submitted to Assessing Officer during assessment proceedings are as under:- Head of Account Amount Bank charges 14120 F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But the plea was that the assessee had given the details of the work done by the labourers. By accepting that plea, finally the matter had gone in favour of the assessee. 11. On the disallowance of expenses penalty u/s. 271 (1) ( c) of the Act cannot be levied as it does not result into any concealment of Income or furnishing inaccurate particulars of income. The Assessing Officer has accepted the facts of diamond job work. 12. The assessee cannot be said to have concealed the particulars of Income or guilty of fraud or gross or willful neglect merely because the books of accounts were rejected and the Assessing Officer estimated higher income. I the following cases it has been held that even if the bills, vouchers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial document to prove the genuineness of the transactions. The learned assessing officer was also convinced that the assessee had incurred expenditure considering the nature of business. The only dispute was with respect of quantum of allowable expenditure since the assessee had not produced all the relevant vouchers. Moreover the learned AO did not bring any materials on record that the assessee has claimed excess expenditure. In such circumstances the estimated addition does not necessarily indicate that there is concealment of income or furnishing of inaccurate particulars of income on the part of the assessee. Therefore we are of the considered view that this case is not a fit case for levy of penalty and, therefore, we delete t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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